Brussels, 22nd September 2023
The International Energy Agency (IEA) ‘Global Hydrogen Review 2023’ has noted the slow roll out of low-carbon hydrogen projects despite the impressive global pipeline.
Only 4% of the announced low-carbon production projects have thus far reached final investment decision (FID) or construction phase, while grey hydrogen continues to dominate (99%) the global landscape. The IEA identifies the following reasons for this inertia:
• Rising equipment and financing costs, particularly for electrolysers which have increased by up to 50%
• States being slow to support projects on the production and demand side, despite high profile announcements in the US and EU, leading to project delays and ensuring grey hydrogen remains the most affordable and accessible option for offtakers
• Insufficient government strategies for achieving hydrogen targets
• An absence of global standards and certification mechanisms for low carbon hydrogen
Jorgo Chatzimarkakis, CEO of Hydrogen Europe, commented: “The IEA’s Global Hydrogen Review 2023 presents a concerning picture of an insufficiently rapid scale up of green and low carbon hydrogen projects around the world. However we commend the thoroughness of the IEA report and its recognition of the hydrogen market as a global – and not purely European – issue. This is positive and shows the importance of hydrogen to global decarbonisation targets.”
For Europe, the report demonstrates what Hydrogen Europe has always argued: the industry needs ambitious and easily accessible support from governments to move from concept to delivery. There is a lot of heavy lifting to be done considering current energy prices, stretched supply chains and high cost of financing. Renewable based hydrogen is highly capital intensive, not least given the additionality requirements and therefore it is extremely sensitive to the cost of financing.
Europe will miss its climate and energy targets if the European Commission and Member States do not urgently step-up funding for hydrogen support schemes. The Hydrogen Bank is an excellent model for Member States to emulate at the national level, something which they have been slow to do so far.
Despite the inadequate speed of roll out, there is still things to be positive about: 700MW of electrolyser capacity was installed by the end of 2022; the projects which have reached FID will bring global capacity to 2GW by the end of 2023 – though half of that will be in China. Should all announced projects be realised by 2030, the world would benefit from 420GW of electrolysis capacity.
For more information:
IEA Global Hydrogen Review 2023
Hydrogen Europe is the European association representing the interest of the hydrogen industry and its stakeholders and promoting hydrogen as an enabler of a zero-emission society. With more than 500+ members, including 25+ EU regions and 30+ national associations, we encompass the entire value chain of the European hydrogen and fuel cell ecosystem. Our vision is to propel global carbon neutrality by accelerating European hydrogen industry
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